Posted
by
timothy
on Saturday November 07, 2009 @07:14PM
from the at-least-given-the-context dept.

AtomicJake writes "As the World Intellectual Property Organization (WIPO) is known for a very rigid course combating counterfeiting and piracy in general, it comes as a surprise that during a meeting of the WIPO Advisory Committee on Enforcement, several presenters have shown nuanced views on the economics of enforcing intellectual property rights. Combating clothing piracy might not be beneficial for the welfare of a developing country. Most surprising is the presentation of WIPO Chief Economist (PDF) Carsten Fink, which says that illegal copies of software may actually be beneficial even for consumers of the original goods. Also the piracy of audio-visual goods creates not only losses but also benefits for e.g. hardware manufacturers. Maybe this is because Mr. Fink wrote the presentation before joining WIPO?"

One of the most interesting suggestions was that rights holders should expect to bear enforcement costs for violations.

At first it would seem to make the rights holder a double victim, once by the infringer, and again by the state. However, rights holders are usually the only group that clearly benefits from suppression of counterfeit goods, and government costs of tracking down every back-ally sneaker salesman could be better spent in other areas.

The suggestion was also raised to make it the mission of government to actively enforce only those infringements that have a public welfare aspect, (bogus medicines, dangerous shoddy rip offs of patented products).

However, there is this old saw thrown in:

If firms cannot prevent third parties from copying the fruits of their inventive and creative activities, they have little incentive to invest financial resources into such activities. Arguably, inventive and creative would not grind to a halt without government intervention. Artists may be motivated by prestige or inherent self-interest in pursuing their profession. Firms may have other means of profiting from new technologies, such as benefiting from a first-mover advantage. Nonetheless, governments have historically opted to supplement these “natural” incentives with exclusive rights to intellectual property.

Which of course is at best a stretch and at worst simply untrue. There is no evidence that invention did not exist prior to patents and copyrights, or would cease without it. Its clear our current system goes way beyond protecting first movers, to the clear detriment of society as a whole and an unwarranted power shift to rights holders.

All in all, a far more balanced report than you would expect from this organization.

However, rights holders are usually the only group that clearly benefits from suppression of counterfeit goods

I disagree. Look at China. Due to rampant piracy, no company can make a name for themselves (I'm talking more physical products vs. media). Anyone trying to make a high quality product is undercut by someone making a low quality knockoff (down to the same name/logo) driving the quality producer out of business. Now everything becomes a low quality product competing over price. This makes it hard to compete globally.
I realize this post will get a lot of heat for saying China has trouble exporting, but when is the last time you purchased something that had the name of a Chinese company on the box. They have the low end covered and their factories can make products for multinationals that oversee the quality, but it will be very difficult for them to sell a car in the US or to compete with a company like Caterpillar. They even have trouble selling major appliances, even though most of the name brands are made over there to begin with.

Having read the whole thing, it actually seems refreshingly balanced to me. The beginning of the part you quoted is really kind of a summary of the consequences pointed out by Kenneth Arrow. I'm willing to believe that, in a world with instant communication, the rate of invention might slow down somewhat if there was no IP.

In the next paragraph the author points out that IP rights are detrimental to consumers and that governments have to strike a balance between encouraging investment in knowledge generation and the detrimental effects from those policies (decreased competition, higher prices).

I can't imagine one of the regular IP organizations even suggesting that IP rights could be in any way detrimental to anyone.

Most legal and political discourse is more nuanced than it usually gets credit for; it's just by the time it reaches slashdot it's been distilled into a misleading, emotionally-charged headline that people can get outraged over.

You seem to have only read the first sentance of that paragraph, because it goes on to give additional incentives besides money, and also admit that companies can potentially profit from new technologies in ways other than the monopoly that copyright provides. Then they state that governments have chosen to suppliment the natural incentives.

It is completely accurate.

A lot of the current extreme backlash against copyright stems from a misunderstanding of what copyright is, and what it is intended to do. The goal of copyright is not to allow content producers to profit from their product - that's simply the vehicle for achieving its goal. The goal of copyright is to produce as much new creative content (art, literature, music, etc) as possible for the overall benefit of the public, and it sounds like at least one person at the WIPO understands this.

You see, copyright is really an exception to an individual's right to use of any property they own for any purpose except directly harming another individual or their property. It is an exception to your natural rights, and as such it has limitations. This doctrine basically says there are some situations where copying all or part of a work for certain purposes like analysis, review, commentary, etc, are fair and the copyright monopoly does not affect those uses. Because fair use is determined by deciding what copyright does not apply to, rather than what fair use applies to, it tends to be fuzzy and subjective.

Now, the companies who profit the most off of copyrighted works couldn't give a rat's ass about producing new content for the enhancement of society as a whole, all they care about is how much their content can be consumed. Obviously if copyrights they own go away after 20-30 years, they can't keep milking that cash cow, so they push for extensions. As soon as they get one they push for more, and more. It doesn't help that half the time congressmen don't have a clue (or sometimes even want to have a clue) about things like copyright and what it is for. So we end up with cartoons that have been copyrighted for 100 years with no end in sight, books that won't come into the public domain until they are largely irrelivant, and music that is copyrighted virtually indefinitely.

Sane copyright is a good thing, however insane copyright really just encourages piracy. Piracy has gotten so prevalent that I'm not even sure copyright is having that much of a detrimental effect on society. The funny thing is, people are generally happy to pay for this stuff if it is priced reasonably. What does it cost a record label to cut the price of a digital download in half and sell three times as many copies? If you can't do that math, you suck at business.

I think for a real distilled view of the impact of piracy, we should ask the adult entertainment industry. They don't do concerts like musicians, or have big cinema releases like regular movies, so pretty much the only income of a porn studio comes from overpriced DVDs and licensed sex toys (as in ones made to mimic stars' body parts). My (obviously anecdotal) experience suggests that most of the pirates causing hollywood headaches are pretty avid consumers of porn, and given that they already pirate normal movies and music, I dare say they don't usually buy their porn either. If we could get some figures from the porn industry on just what impact piracy has had on them, then we could probably extrapolate that to the regular entertainment industry. Given that porn is still both plentiful and expensive, and I've actually seen the number of adult stores increase in the past few years, suggesting proffitability, I think the results of such a survey would be interesting to people on both sides of the copyright fence.

No, quite a lot of stuff from China is not counterfeit. A lot of those products are manufactured by Chinese companies under their own names or under other made-up names, which by definition makes them not counterfeit because they aren't claiming to be something they're not. A lot of it is the result of manufacturing overruns, which while not authorized by the manufacturer and thus in a strict legal sense counterfeit, are in fact identical to the actual products, and thus not counterfeit by most sane definitions. And so on. Don't overgeneralize.

But Paramount cry poor. Their executives must be living out of dumpsters on their own lot. Well, let's we the public make a deal:

1. The public shall stop downloading torrents so long as2. The studios make them available online immediately without DRM for a reasonable price AND I MEAN REASONABLE.. $400M suggests you're milking it *3. The public backlash is being fueled by hatred at the erosion of fair use rights. Like the Sono Bono Copyright Extension act which has stopped works owned by filthy rich corporations from entering the public domain. So if Congress repeals that glutinous piece of legislation (and Disney cedes the rights to Mickey Mouse and Winnie the Pooh to the public domain) then we'll have a deal. **4. And stop bribing politicians too. Lobbyists who exchange cash or favours or "donations" should go to jail as the people who receive them.

However, rights holders are usually the only group that clearly benefits from suppression of counterfeit goods

I disagree. Look at China. Due to rampant piracy, no company can make a name for themselves (I'm talking more physical products vs. media). Anyone trying to make a high quality product is undercut by someone making a low quality knockoff (down to the same name/logo) driving the quality producer out of business. Now everything becomes a low quality product competing over price. This makes it hard to compete globally.

I realize this post will get a lot of heat for saying China has trouble exporting, but when is the last time you purchased something that had the name of a Chinese company on the box. They have the low end covered and their factories can make products for multinationals that oversee the quality, but it will be very difficult for them to sell a car in the US or to compete with a company like Caterpillar. They even have trouble selling major appliances, even though most of the name brands are made over there to begin with.

Let me turn this around. What if the rest of the world were like China in this matter? Isn't that more ideal? Companies fighting over pennies and adopting eachothers ideas constantly, and consumers that just keep getting better and cheaper products. With this in mind, is it so easy to say that the model in China is flawed? Rather than the artificial scarcity which the rest of the world has accepted.

"D) A significant amount of Americans avoid things that are Chinese. There are a lot of Americans who think that China is going to nuke the US or other crazy theories, but nonetheless some people do believe them and so that keeps a lot of Chinese-sounding goods from American shores."

I'm not in the US, but, yes, I try to avoid products made in China when there is a choice. The reasons have nothing to do with crazy theories or prejudice, but simply: A) I do not want to (indirectly) support a non-democratic government, and B) I'd rather support industry in my country or another country where labor, safety, and environmental standards are rather better. I'm even willing to pay a little more to get that.